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AUSTRALIA may have to increase its migration intake considerably if it is to overcome a huge shortage of workers in the next few years, with warnings that it will run out of skilled workers.
It will face a labour shortfall of 500,000 in 17 years, according to a new study.
The findings, prepared for the All India Management Association by Boston Consulting Group, have triggered fresh calls from business for the Federal Government to be more aggressive in boosting immigration.
The report says that an ageing population and low birth rate could create a shortage of half a million workers in Australia by 2020.
For the whole developed world, it forecasts a labour shortage of close to 60 million. Conversely, unemployment levels in developing countries would reach 100 million.
Australian Institute of Management executive director Bernard Cronin said the combination of a greying population and declining birth rates was a time bomb.
He said changes by the Federal Government enabling a bigger intake of skilled workers were a short-term fix. "In just a few years, Australia will start to run out of skilled workers and we will have to decide what types of industry we have the capacity to support".
He said that the industries which were worth supporting included food processing, wine production, hospitality and tourism, education and training.
"Countries like Australia, the US, the UK and even Russia and China are facing labour shortages of unprecedented levels. We simply won't have enough workers to support our economies. The US alone has to find 17 million new workers or send business elsewhere," Mr Cronin said.
There are already signs that the push offshore is gaining momentum. A Federal Government report has urged Australian companies to consider moving operations ranging from call centres to software development to India to exploit lower wages.
Mr Cronin said these developments were just the start.
Australia needed to look closely at what industries were worth retaining and what changes were needed to the education system and immigration rules to ensure they did not disappear.